You must have heard: It is not how much you earn, but how much you save that makes you rich! We believe, it is how much you invest! Money lying idle in your bank account isn’t going to do you any favours, rather it would lose its purposefulness with the rising inflation. Thus, it is best to not let it be idle but to invest it in a good place. There are investment avenues to bank that money into, and if you want to know more about this subject, please read this article.
1. Bullion investments
When you invest in gold, silver, platinum or any other precious metal, you are investing long-term and safely. Very few investors are interested in this area because it requires long-range planning and knowledge of several sectors. However, there are several companies like Goldstackers which offer expert advice on gold and silver investing, you can visit their websites and pick up some valuable tips.
Most people who are aware of investments already know about stocks and shares. When businessmen float companies, they offer stocks or shares to other people who might be interested in co-owning that company. Over a period, these shares might appreciate or depreciate in value depending upon the performance of that business or the state of the economy. When a particular company does well, it may distribute a dividend to its shareholders or may re-deploy its profits for further growth.
3. Mutual funds
Here, several investors pool their funds together and invest jointly in several businesses. Those investments could be in the form of shares or debts or bonds. Every mutual fund is managed by an asset manager, who knows what their clients are investing for and suggests the right choices for their portfolio. As is the case with shares, investors may be rewarded by way of dividends in mutual funds too.
4. Debt or Loans
Several companies around the world raise investments by offering debt or loans to the general public. For example, a company asks for 1000$ from you. at a promise that they would pay you a certain % of yields as returns after a set period. However, this company may or may not default on your loan. For this reason, stock market regulators of Australia regularly grade companies on the basis of loan worthiness.
5. Fixed deposits
These instruments are offered by banks to their depositors. This scheme works quite similar to debts or loans except that it is administered by public or private sector banks. Needless to say, Fixed Deposits are far more reliable and trusted than debts, loans, stocks or bonds. However, they come with a lesser chance of growth and a smaller window for money multiplication.
Most seasoned investors already know about derivatives. If you are new to the world of finance, a derivative contract is one that is signed between two parties on the basis of some underlying conditions like stocks, debt, and other measurable things.
Insurance is not just about insuring your life, it is much more than that. There are various types of insurance available today, to ensure that consumers feel safeguarded against any financial burden. Most insurance schemes do not multiply your money but since they provide a cushion for you to bounce back during financially stressful times, they are a well-crafted financial asset class. To buy insurance, you need to pay a premium depending upon your age, and medical condition.
8. Provident funds
These are retirement funds and are generated when you are employed. Your retirement corpus comprises two equal parts- one is your company’s contribution, while the other is yours.
9. Real estate
Real estate investments are about investing in the property market. You could either buy flats or apartments and resell them, or you could invest in land and rent it out, or develop it into a building depending upon its area, or eventually, redo it as your home.
10. Sovereign bonds
These bonds are issued by the government and are the safest investment options available in the market. The Government promises to pay regular interest on the base amount. The investors get the benefits of liquidity as the interest cheques come in regular intervals, and the base money is paid upon maturity.
11. Commodity futures
These are contracts signed between two individuals or entities. Commodity futures are done with respect to oil, metals, currencies, grain or animal products.
We hope this article has helped you gain clarity on investments.